IMO edges closer to global carbon levy

News

While several pricing options are still being considered, there’s a growing sense that a consensus is forming around a flat or universal GHG pricing mechanism.

International Maritime Organisation

The International Maritime Organisation (IMO) is moving closer to a global carbon levy aimed at decarbonising shipping, following the 82nd session of the Marine Environment Protection Committee (MEPC). While a final decision on the levy was not expected during this session, the focus was on reviewing the impact and refining the technical and economic measures necessary for the shipping industry to meet the targets of the 2023 IMO Greenhouse Gas (GHG) Strategy.

The IMO’s approach, decided at MEPC 80 in 2023, includes a two-part strategy: a technical element, which will regulate the phased reduction of marine fuel GHG intensity, and an economic element, which would introduce a GHG emissions pricing mechanism. Both elements are scheduled for adoption in 2025, with implementation expected by mid-2027.

At MEPC 82, member states continued working on the legal text for carbon emissions pricing, which will guide future talks. Although no full agreement was reached, progress was made, and discussions touched on creating a GHG fund and distributing carbon pricing revenues. While several pricing options are still being considered, there’s a growing sense that a consensus is forming around a flat or universal GHG pricing mechanism.

The International Chamber of Shipping (ICS) welcomed further progress achieved on developing a base text for amendments to the MARPOL Convention, adding “much more work still needs to be undertaken by governments before this ‘Net-Zero Framework’ is ready to be approved at next year’s critical MEPC meeting in April.”

“A universal GHG contribution system is the best chance the shipping industry has to meet the IMO net zero GHG emissions target by or around 2050. We are pleased that the concept of a universal GHG contribution by ships, per tonne of CO2e emitted, remains firmly on the table at IMO. There is strong support for this from a clear majority of IMO Member States, which also control most of the world’s shipping tonnage,” ICS said, highlighting a broad agreement to reduce the cost gap with conventional marine fuel oil to incentivise a rapidly accelerated uptake of zero/near-zero GHG fuels and technologies.

“The vital need for a reward element for first movers, and for setting up an IMO Fund to support a just and equitable transition in developing countries is clear,” ICS added.

A comprehensive impact assessment of the proposed GHG reduction measures was completed, but concerns raised during the session prompted the decision to conduct further evaluations. Specifically, additional work will focus on the potential impacts of GHG regulations on food security ahead of MEPC 83.

Other decisions

Other important decisions include the adoption of regulations to designate the Canadian Arctic and the Norwegian Sea as NOx, SOx and PM Emission Control Areas (ECAs).

For the Canadian Arctic, the requirements take effect as follows:

  • The 0.10% fuel sulphur content requirement takes effect from 1 March 2027.
  • Tier III NOx requirements will apply to ships constructed (keel-laid) on or after 1 January 2025, although the requirements will enter into force on 1 March 2026.

For the Norwegian Sea, the requirements take effect as follows:

  • The 0.10% fuel sulphur content requirement takes effect from 1 March 2027.
  • Tier III NOx requirements will apply to ships contracted on or after 1 March 2026; or in the absence of a contract, keellaid on or after 1 September 2026; or delivered on or after 1 March 2030.

The IMO also began reviewing short-term GHG reduction measures, focusing on the Carbon Intensity Indicator (CII), the Ship Energy Efficiency Management Plan (SEEMP), and the Energy Efficiency Existing Ship Index (EEXI). While no gaps were found in EEXI, challenges related to CII and SEEMP will be addressed in two phases.

Before January 2026, the review will focus on CII reduction factors, SEEMP enhancements, idle and port waiting times, short voyages, and enforcement issues. After January 2026, the review will cover self-unloading bulk carriers, adverse weather, ballast voyages, and specific ship types like smaller LNG carriers. Further updates will be reported at MEPC 83 in April 2025.

The session has also continued the review of the Ballast Water Management (BWM) Convention.

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IMO edges closer to global carbon levy ‣ WorldCargo News

IMO edges closer to global carbon levy

News

While several pricing options are still being considered, there’s a growing sense that a consensus is forming around a flat or universal GHG pricing mechanism.

International Maritime Organisation

The International Maritime Organisation (IMO) is moving closer to a global carbon levy aimed at decarbonising shipping, following the 82nd session of the Marine Environment Protection Committee (MEPC). While a final decision on the levy was not expected during this session, the focus was on reviewing the impact and refining the technical and economic measures necessary for the shipping industry to meet the targets of the 2023 IMO Greenhouse Gas (GHG) Strategy.

The IMO’s approach, decided at MEPC 80 in 2023, includes a two-part strategy: a technical element, which will regulate the phased reduction of marine fuel GHG intensity, and an economic element, which would introduce a GHG emissions pricing mechanism. Both elements are scheduled for adoption in 2025, with implementation expected by mid-2027.

At MEPC 82, member states continued working on the legal text for carbon emissions pricing, which will guide future talks. Although no full agreement was reached, progress was made, and discussions touched on creating a GHG fund and distributing carbon pricing revenues. While several pricing options are still being considered, there’s a growing sense that a consensus is forming around a flat or universal GHG pricing mechanism.

The International Chamber of Shipping (ICS) welcomed further progress achieved on developing a base text for amendments to the MARPOL Convention, adding “much more work still needs to be undertaken by governments before this ‘Net-Zero Framework’ is ready to be approved at next year’s critical MEPC meeting in April.”

“A universal GHG contribution system is the best chance the shipping industry has to meet the IMO net zero GHG emissions target by or around 2050. We are pleased that the concept of a universal GHG contribution by ships, per tonne of CO2e emitted, remains firmly on the table at IMO. There is strong support for this from a clear majority of IMO Member States, which also control most of the world’s shipping tonnage,” ICS said, highlighting a broad agreement to reduce the cost gap with conventional marine fuel oil to incentivise a rapidly accelerated uptake of zero/near-zero GHG fuels and technologies.

“The vital need for a reward element for first movers, and for setting up an IMO Fund to support a just and equitable transition in developing countries is clear,” ICS added.

A comprehensive impact assessment of the proposed GHG reduction measures was completed, but concerns raised during the session prompted the decision to conduct further evaluations. Specifically, additional work will focus on the potential impacts of GHG regulations on food security ahead of MEPC 83.

Other decisions

Other important decisions include the adoption of regulations to designate the Canadian Arctic and the Norwegian Sea as NOx, SOx and PM Emission Control Areas (ECAs).

For the Canadian Arctic, the requirements take effect as follows:

  • The 0.10% fuel sulphur content requirement takes effect from 1 March 2027.
  • Tier III NOx requirements will apply to ships constructed (keel-laid) on or after 1 January 2025, although the requirements will enter into force on 1 March 2026.

For the Norwegian Sea, the requirements take effect as follows:

  • The 0.10% fuel sulphur content requirement takes effect from 1 March 2027.
  • Tier III NOx requirements will apply to ships contracted on or after 1 March 2026; or in the absence of a contract, keellaid on or after 1 September 2026; or delivered on or after 1 March 2030.

The IMO also began reviewing short-term GHG reduction measures, focusing on the Carbon Intensity Indicator (CII), the Ship Energy Efficiency Management Plan (SEEMP), and the Energy Efficiency Existing Ship Index (EEXI). While no gaps were found in EEXI, challenges related to CII and SEEMP will be addressed in two phases.

Before January 2026, the review will focus on CII reduction factors, SEEMP enhancements, idle and port waiting times, short voyages, and enforcement issues. After January 2026, the review will cover self-unloading bulk carriers, adverse weather, ballast voyages, and specific ship types like smaller LNG carriers. Further updates will be reported at MEPC 83 in April 2025.

The session has also continued the review of the Ballast Water Management (BWM) Convention.

You just read one of our articles for free

To continue reading, subscribe to WorldCargo News

By subscribing you will have:

  • Access to all regular and exclusive content
  • Discount on selected events
  • Full access to the entire digital archive
  • 10x per year Digital Magazine

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